Financial development, economic growth and total factor productivity in Algeria

An empirical study

Authors

  • Souman Mohand Ouidir University of Bejaia, Department of Economic, LED Laboratory, Algeria
  • Benahmed Kafia University of Bejaia, Department of Economic, LED Laboratory, Algeria
  • Humberto Ribeiro University of Aveiro, OSEAN, Portugal

Keywords:

Financial Development, Economic Growth, TFP, Technological Progress, VAR model

Abstract

The objective of this study is to empirically test the relationship between the development of financial intermediaries and total factor productivity (TFP) in the case of the Algerian economy during the period 1970-2020. The research approach employed in this research paper consists on the development of an econometric model, using the vector autoregressive (VAR) approach and the causality test, in the sense of Granger. The variables used as indicators of financial development were the money supply ratio, the share of domestic credit granted to the private sector as a percentage of GDP, trade openness, foreign direct investment, and human capital. The results of the VAR model employed show that financial development has a positive and significant impact on TFP, through domestic credit to the private sector and trade openness, while the other variables have no significant effect on TFP.

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Published

2024-08-18

How to Cite

Ouidir, S. M., Kafia, B., & Ribeiro, H. (2024). Financial development, economic growth and total factor productivity in Algeria: An empirical study. International Journal of Economic Perspectives, 18(2), 417–433. Retrieved from http://ijeponline.org/index.php/journal/article/view/568

Issue

Vol. 18 No. 2 (2024)

Section

Peer Review Articles
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Copyright (c) 2024 Souman Mohand Ouidir, Benahmed Kafia, Humberto Ribeiro

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